This case is the first before the
Court of Justice specifically on the sharing economy and the extent to which
coordination via platform should be treated as removing unnecessary red-tape,
or as seeking to avoid regulation in the public interest (in the form of concerns
about passenger safety) as well as permitting unfair competition. While the Commission seems in favour of the
(unequal) sharing economy, Advocate General Szpunar sees the position a little
differently.

FACTS

Spanish law envisaged that taxi
firms, and transport intermediaries, should hold a licence. Asociación Profesional Elite Taxi (APET)
sought to challenge the use Uberpop, an app which allows non-professional
private drivers to transport passengers using the drivers’ own cars, where
neither Uber nor the drivers have the requisite licences. Passenger users download the app from Uber
and provide their bank details to Uber.
On receiving a request for a car, the app notifies drivers and
calculates the fare (this latter based on distance but also demand for taxi
services at that time). The payment is
made to Uber, which deducts a percentage and then pays the remainder to the
driver. To use the app as a driver, an
individual must comply with Uber’s terms and conditions. APET sought a cease
and desist order and a prohibition of future similar behaviour on the basis of
unfair competition. Uber resisted APET’s
claims on the basis that it was not providing transport/taxi services but was
rather a digital intermediary.

QUESTION REFERRED

The national court referred the
questions of how to classify Uber’s services to the Court of Justice. The
answer would affect with EU derived legal regime would be applied to Uber, with
the corollary that the State’s freedom to impose licensing requirements would
correspondingly vary depending on which regime was held to be applicable. In essence, the question was whether Uber
fell within the provisions of the e-Commerce
Directive (Directive 2000/31) as an information society service provider,
or whether the Services
Directive (Directive 2006/123) or the TFEU itself applied in this
context. Here, there is a distinction
between a service general and a service in the field of transportation.

OPINION

The first phase of the opinion
comprises some general remarks about the significance of the ruling and the
impact of different types of competence on the outcome. The Advocate General also assumed that the
respondent in the case should be the Dutch company (Uber BV), which operates
the app in the EU, rather than the Spanish company, Uber Spain, which is
responsible for advertising.

The Advocate-General then moved
on to consider the scope of the e-Commerce Directive, specifically the meaning
of ‘information society services’ as defined in Article 2(a) of that Directive by
reference to Article 1(2) of Directive
98/34 (the Directive on notifying new technical barriers to trade). Under
Article 1(2), an information society must be a service provided for
remuneration, at a distance, by electronic means and at the individual request
of a recipient. In the view of the Advocate-General, the questions of whether
there is a service provided for remuneration and at individual request appeared
unproblematic [para 27], but questions arose as to the test of whether the
service is provided at a distance by electronic means. In the eyes of the Advocate General the
problem related to the fact that what was in issue was a ‘composite service’
[para 28].

The Advocate-General emphasised
that the definition concerned services “’entirely
transmitted, conveyed and received by wire, by radio, by optical means or by
other electromagnetic means’” [para 29, quoting 2nd indent of 2nd subparagraph
of Article 1(2), Directive 98/34, emphasis in Opinion]. So, services not delivered by electronic means
did not fall within the scope of the e-Commerce Directive; services which were
incidental to such services would likewise not be liberalised by the e-Commerce
Directive. Assuming that they did would undermine the perceived effectiveness
of EU law [para 31]. Thus:

… an
interpretation of the notion of information society services which brings
online activities with no self-standing economic value within its scope would
be ineffective in terms of the attainment of the objective pursued by Directive
2000/31. [para 32]

The Advocate General suggested
that a composite service would be treated as an information society service in
two circumstances:

-where the two elements could be seen as
economically independent of one another they would be treated separately for
regulatory purposes – the electronic element likely falling with the eCommerce
Directive; and

-where the service provided was substantially or predominantly
provided by electronic means.

A common example of the first
case would be a three party situation where an intermediary service provider
facilitates a transaction between a user and an independent service
provider/seller. While the intermediary
provides added value, the trader here pursues an independent business. In a two party situation – where the
intermediary provider is also the provider of a service not provided by
electronic means, the two elements cannot be seen as separable; rather, they
‘form an inseparable whole’ [para 35].

In that instance, it will be
necessary to see if the composite service falls within the second category;
that is, whether the bundle falls within the eCommerce Directive or outside it.
For determining the answer to this second question, the key element is where
the economic value lies. So where the main component is performed online that
service should be classified as an information society service (assuming the
other elements of the test are met); conversely, where it is not then the
service does not fall within the eCommerce Directive. The Advocate General,
citing Ker-Optika
(Case C-108/09) suggests that this test would be satisfied in the case of
online sales (via the seller’s own website).
Delivery of goods is ‘simply the performance of a contractual
obligation’ [para 36].

Applying these tests here, the
Advocate General noted that Uber provided more than a matching service of
passengers to taxi drivers. It sets down the essential characteristics of the
service to be provided (eg quality and age of vehicle; drivers to have licences
and no criminal record), it informs drivers where and when there are likely to
be a high volume of trips and/or preferential fares, and it sets the prices. Uber maintains indirect control over drivers
through its ratings function. Thus, in
the view of the Advocate General,

‘… Uber exerts
control over all the relevant aspects of an urban transport service …. (…) Uber therefore controls the economically
significant aspects of the transport service offered through its platform’
[para 51].

While the Advocate General sought to
distinguish this case from the cases concerning whether drivers are employees
of Uber, on the basis of this indirect control the Advocate General concluded
that:

‘Uber’s activity comprises a single supply of
transport in a vehicle located and booked by means of the smartphone
application and this service is provided, from an economic standpoint,
[citations omitted] by Uber or on its behalf’ [para 53].

The Advocate General sought to
distinguish the activity of Uber from intermediary services on the basis that
Uber drivers do not carry out an independent activity. Instead, their activity
exists solely because of the existence of the platform. By contrast, flight or hotel booking systems
are separate from the independent services operated by the hotels and airlines
and for whom the websites are just one mechanism of advertising their services.
Furthermore, it is the hotels and airlines which control the prices and the
conditions on which their services are offered. Finally, a choice is offered to
the user between hotels/airlines.

In opposition to the Commission’s
views on the sharing economy, the Advocate General did not think that the fact
that Uber did not own the cars was determinative. Uber is more than a ‘mere
taxi booking application’ [para 64].
Because of the extent of the innovation on the transport sector caused
by the way the apps links drivers and passenger and the conditions on which it
does this, ‘it is undoubtedly the supply of transport which is the main supply
and which gives the services the economic meaning’ [para 64]. The supply of connection services is
ancillary to this.

Having determined that Uber’s
services do not fall within the eCommerce Directive, the Advocate General considered
the Services Directive: Article 2(2)(d) specifies that the Services Directive
does not apply to transport services.
The Advocate General confirmed that Uber’s taxi services were transport
services in the context of Article 2(2)(d) Services Directive as recital 21
refers to ‘urban transport [and] taxis’ [cited para 68]. The service likewise falls within the
exception to the Treaty rules on free movement of services (Article 58(1) TFEU)
and therefore subject to the specific transport sector rules in Article 90 TFEU
et seq.

The Advocate-General concluded by
considering the position should Uber’s app be deemed to fall within the
eCommerce Directive. He noted that
Member States would then be limited in terms of the conditions that they could
apply to such a service; drivers however would still be subject to any relevant
national regulation. The Advocate General argued that Uber nonetheless could be
penalised for unfair competition as ‘it is responsible not only for the supply
whereby passengers and drivers are connected with one another, but also for the
activity of those drivers’ [para 86], whether or not the booking app were seen
to be separate from the transportation service or not. The Advocate General therefore proposed that
the eCommerce Directive

‘does not
preclude requirements relating to the activity of transport in the strict sense
being established in national law or the imposition of penalties on Uber for
failing to comply with those requirements, including by means of an injunction
ordering it to discontinue the service’ [para 88].

Comment

This opinion will be grabbing the
headline news because of the headline fact that – shock, horror- Uber is a taxi
company. The reasoning used is worth a
little more attention, because our understanding of that reasoning, if the
Court of Justice follows the same lines, will affect any wider ramifications
for the ‘sharing’ economy more generally.
So while the Advocate-General starts his opinion by suggesting that the
subject matter of the case is ‘narrow’ (para 2), the repercussions are
potentially a little broader. A
recognition of this fact can be inferred by the approach of the Advocate
General to the question of scope of the eCommerce Directive and the insistence
that the eCommerce Directive regulates services that are entirely delivered by
electronic means – the emphasis is that of the Advocate General (para 29), with
the result that it cannot be said

That any
trade-related online activity, be it merely incidental, secondary or
preparatory in nature, which is not economically independent is, per se, an
information society service (para 37).

The opinion re-iterates this
point when considering the app as an information society service (see below). The
significance of this is that the eCommerce Directive cannot be used to avoid
regulation of the main service, at least to the extent that such regulation is
not a barrier to trade unacceptable to EU law more generally and as exemplified
by the Services Directive, just because some aspect of the business is on-line.
This leads to a second general point:
the Opinion is noteworthy for the way it manoeuvred the circumstances of the
case around to the twin obstacles to national regulation of the eCommerce
Directive and the Services Directive, especially given that the Commission, in
its Communication on the Collaborative Economy (COM(2016)356) seem to
view the Services Directive in particular providing a basis for such
services.

The tests identified by the
Advocate-General will not seem unusual – talking about whether the different
elements of a composite service are severable or preponderantly one thing or
another can be seen elsewhere, for example in the case of goods and services
(an example of which is given by Advocate General Szpunar in his reference to Ker-Optika, para 36), or even questions
of competence.

A couple of points can be made
here. The first is that in some of the
factors to be taken into account in determining independence, the Advocate
General comes close to eliding the question of what is the nature of the
service with the question of who is providing it. Many of the factors the
Advocate General considered reflect the Commission’s Communication from last
year. Of potentially more consequence is the impact considering as a factor the
question of whether the service would exist without the app. This can be seen by contrasting the position
of Airbnb with Uber. If we look at
control, Uber is caught because of its control over key aspects such as access
to passengers, and price (detailed in paras 43-51); on these considerations
Airbnb which does not set price might not be caught. However, if the test is
that ‘the activity exists solely because of the platform’ (para 56), for Airbnb
as for Uber, the answer might well be ‘yes’.
Of course, Uber and Airbnb are different in that transport does not fall
within the Services Directive but rather is dealt with by specific provisions
within the TFEU. Nonetheless, the
recitals to the Services Directive specify that:

it does not apply
to requirements, such as road traffic rules, rules concerning the development
or use of land, town and country planning, building standards (Rec 9),

some of which may affect the
running of hotels or B&Bs. Further, the directive does not apply to taxation
(Article 2(3)), so for example, taxes on short term lets may be unaffected by
the Services Directive (though dealt with under the TFEU).

A further point that is worthy of
note is the consequence of seeing Uber and the drivers as providing separate
services. The requirement to have a
licence to provide a connection service in the context of transportation would
fall within the scope of the eCommerce Directive and would be caught be the
prohibition on authorisations set out in Article 2(h)(i); the Advocate General
was of the opinion that is was unlikely that any restriction on the electronic
aspect of the service could be justified by considerations of public interest. The prohibition does not, however, extend to
the regulation of transport services - they are not provided by electronic
means. So the regulation of taxi
services remains possible and, as noted, Uber remains responsible for the
drivers’ activities (para 86). Arguing
Uber’s activity as whole should benefit from the liberalising principles in the
eCommerce Directive would run the risk of undercutting any form of regulation
‘because all traders are currently in a position to offer services by
electronic means….’ (para 87). Could a
similar argument be put forward in other sectors of the sharing economy? In principle, yes, but presumably only where
the platform has exerted Uber-like control over the actual provision of the
services.

Even when the Grand Chamber Court
of Justice has handed down its ruling, this will not be the end of the Uber
saga. Currently pending before the Court
is a reference from France concerning the imposition of penalties on Uber for
running an unlicensed taxi service: Case C-320/16 Criminal
Proceedings against Uber France, which raises the question of whether
France should have notified its rules as a technical regulation under Directive
98/34.

Thursday, 18 May 2017

Anastasia Karatzia, Assistant
Professor in EU Law, Erasmus University Rotterdam and currently Visiting
Research Fellow at the School of Law and Social Justice, University of
Liverpool

Introduction

A
few months ago, we saw the first annulment by the EU’s General
Court of a Commission Decision refusing registration of a proposed European
Citizens’ Initiative (ECI), in the case of Minority
SafePack.
Last week, there was an even bigger development in the case law of the General
Court regarding the interpretation of the ECI’s legal admissibility test: in
the Stop
TTIPcase[1]
the Court annulled another Commission’s Decision, this time not on a procedural
ground such as the one in Minority
SafePack, but on the substantive ground that the Commission breached
Article 11(4) TEU (which sets out the power to adopt the ECI law), and Articles
2(1) and 4(2)(b) of the ECI
Regulation, which sets out one of the criteria for the legal admissibility test.

In
Stop TTIP, the General Court clarified
a matter of contention between ECI organisers / stakeholders and the Commission
viz. the scope of an ECI and, more specifically, the way in which the
Commission had limited the acceptable subject-matters for the purposes of
registering an ECI. These limitations were stipulated in the Commission’s
letter of response regarding the refusal of registration for the proposed ‘Stop
TTIP’Initiative, which was submitted
for registration in July 2014. The Initiative proposed to cease the
negotiations for the Transatlantic
Trade and Investment Partnership agreement (TTIP) between the EU and US,
and to prevent the conclusion of the Comprehensive
Economic and Trade Agreement (CETA) between the EU and Canada.

In
more detail, ‘Stop TTIP’ had invited the Commission to ask the Council to
repeal its decision to authorise the opening of the TTIP negotiations under
Article 218(2) TFEU (which is the legal rule on the process of the EU
negotiating treaties). It also asked the Commission to submit a proposal for a
Council decision not to conclude CETA. In September 2014, the Commission
replied to the organisers that both their proposals had been rejected on the
basis of Article 4(2)(b) in conjunction with Article 2(1) of the ECI
Regulation, because they fell outside the framework of the Commission’s powers
to submit a proposal for a legal act of the Union for the purpose of
implementing the Treaties.

The Commission’s reply revealed two limitations on the
scope of the ECI.[2]
First, the Commission stipulated that an ECI cannot invite the Commission to adopt
preparatory acts. The Commission argued in its reply that its proposals to the
Council under Article 218 TFEU to authorise the opening of negotiations for
international agreements were not proposals for legal acts. The Council Decisions
authorising the opening of negotiations for an international agreement are
preparatory acts that produce legal effects only between the EU and its Member
States and between the EU institutions. Therefore, the Commission’s relevant
proposals to the Council lacked legal effect against third parties.
Accordingly, the position of the Commission was that ‘Stop TTIP’ was not
proposing any legal acts for the purpose of implementing the Treaties and could
not be registered. Second, the Commission declared that an ECI cannot invite
the Commission to propose a decision not
to adopt a legal act such as a proposal not to conclude CETA, or to refrain from
proposing a legal act. Such a proposal ‘would not deploy any autonomous legal
effect beyond the fact of the legal act at issue not being adopted.’ The
negative nature of the ‘Stop TTIP’ proposals, together with the fact that it
arguably did not propose ‘legal acts’ as required by Article 11(4) and Article
2(1) ECI Regulation, led to the refusal by the Commission to register it. Notably,
the limitations imposed by the Commission are not clearly indicated in the ECI
Regulation. Instead, they resulted from the Commission’s own interpretation of
the ECI’s legal framework.

After the Commission’s rejection, the ‘Stop TTIP’ organisers
followed a twofold course of action: they brought a case before the
EU General Court, which is the first instance part of the Court of Justice of
the European Union (CJEU), contesting the Commission’s decision to refuse
registration of their Initiative, and they started what they named ‘a
self-organised ECI’, which was a campaign to collect signatures outside the
contours of the ECI’s legal framework. The campaign went on to collect more than
3 million signatures, which the organisers handed over to the Commission in October
2015.

It
becomes apparent from the above overview that the significance of the General
Court’s judgment in the Stop TTIP case
does not derive only from the question of whether the specific Initiative was
wrongly refused registration, but also from the question of whether the ECI’s
scope to propose EU action was rightly limited by the Commission beyond what is
explicitly written in the ECI Regulation. In this sense, the General Court’s
judgment is a milestone both for the ECI organisers themselves and for the
functioning of the ECI as a mechanism for citizens’ participation. This short
commentary will touch upon the key aspects of the judgment.

The arguments of
the parties

The
applicants in the case made two main arguments. They claimed that the Commission
(i) breached Article 11(4) TEU and Article 4(2)(b) of the ECI Regulation, and
(ii) breached the principle of equal treatment (Article 20 of the EU Charter of
Fundamental Rights) because it had registered in the past the ‘Swissout’ Initiative which had very similar
objectives with ‘Stop TTIP’. The judgment focused on the first ground of review
and did not deal at all with the second.

In
support of their claim, the applicants brought forward three main arguments.
Firstly, they argued that the Council’s Decisions authorising the conclusion of
an international agreement under Article Article 218(5) TFEU is not a
preparatory act. With regard to the Initiative proposals concerning the CETA
negotiations, which were already taking place at the time of the request for registration,
a Decision by the Council to the Commission not to conclude CETA would not be a
preparatory act but an act with legally binding effects. Regarding the
Initiative proposals concerning a proposal by the Commission to the Council to
repeal the Decision authorising the negotiations for TTIP, such a Decision
would result to the termination of the negotiations, and would have been final
and legally binding. In any case, the scope of an ECI should not be limited to proposing
legal acts with definitive, legally binding effects vis-à-vis third parties.
Neither the background to the ECI Regulation, nor the ECI’s overall regulatory
framework call for such a restrictive reading of the term ‘legal acts’ (para
12).

Secondly,
the applicants argued against the Commission’s position that an ECI cannot
concern acts that deploy legal effects only between the institutions concerned.
For the purposes of the ECI, the term ‘legal act’ should be defined broadly in
light of Articles 288 – 292 TFEU, and should include Commission’s Decisions
that are outside the ordinary legislative process (para 13).

Thirdly,
the applicants referred to the potentially ‘destructive effect’ of the proposed
Initiative on the negotiations for TTIP and CETA. This alleged ‘destructive
effect’ cannot be put forward as a ground for refusal under the rationale that
the Initiative’s proposals did not have the purpose of implementing the
Treaties. In the view of the applicants, ‘the right of citizens to participate
in the democratic life of the Union includes the possibility of citizens acting
with the purpose of modifying, reforming, ratifying, or asking for a partial or
total annulment of EU law’ (para 14).

The
Commission’s main counter-arguments supported the position expressed in its
2014 letter of response to the organisers. The Commission reiterated its
position that the Council Decision to approve the opening of negotiations for
an international agreement is only preparatory because it only produces legal
effects between the two EU institutions. Based on a ‘systematic and
teleological interpretation’ of Articles 2(1) and 4(2)(b) of the ECI
Regulation, it can be concluded that an act of preparatory character falls
outside the definition of a ‘legal act’ for the purposes of registering an ECI
(para 19). This argument was further supported by the assertion that the notion
of democratic participation in the EU refers to the participation of citizens
only in matters which (potentially) fall under their legal sphere. Instead, the
Council and the Commission enjoy sufficient democratic legitimacy to be the
ones to adopt acts that affect the relationship between the EU institutions (para
20).

In
addition, the Commission repeated its argument that an ECI cannot ask it not to
propose a particular legal act or to propose a decision for the non-adoption of
a legal act. Interestingly, it referred to Article 10(1)(c) of the ECI
Regulation which deals with the final stage of the ECI process, whereby the
Commission is obliged to issue a Communication setting out ‘the action it
intends to take, if any’. From this, the Commission concluded that only ECIs
that aim to the adoption of a legal act or to the repeal of an existing legal
act can be registered. Otherwise, a declaration by the Commission that, as a
response to an ECI, it does not aim to propose the adoption of a legal act
would have excessively limited the Commission’s monopoly of legislative
initiative. According to this argument, an ECI asking for the Council to repeal
a Decision opening the negotiations or asking it not to conclude an agreement,
would have been an ‘unacceptable interference’ in an on-going legislative
procedure (para 21).

The judgment of the
General Court

The
General Court began with a reference to the ECI’s legal framework. It mentioned
Article 11(4) TEU, and the ECI Regulation, specifically Article 2(1)
(definition of the ECI), Article 4(2)(b) (the legal admissibility test), and
Article 10(1)(c) (the obligation of the Commission to respond to a successfully
submitted ECI) (paras 23-27). It then explained that the ECI organisers had not
asked the Commission not to submit a
proposal to the Council for the signing and conclusion of TTIP and CETA.
Instead, the organisers asked the Commission to submit to the Council two
proposals: (a) a proposal to recall the authorisation for the opening of
negotiations for TTIP; and (b) a proposal not to authorise the signing of TTIP
and CETA and thus not to conclude these agreements (para 28). As such, the
Court also clarified that the current case did not contest the competence of
the Commission to negotiate TTIP and CETA. Instead, it was a challenge to the
reasons given by the Commission for the refusal of the proposal (para 29).

Subsequently,
the Court specified that the Commission has the competence to act in the way
asked by the applicants, i.e. to submit to the Council the two proposals (paras
30-32), and went on to deal with the question of whether these actions can be
excluded from an ECI either because they are preparatory acts, or because they
are not necessary for the implementation of the Treaty, as the Commission had
argued (para 33).

On
the definition of a ‘legal act’ for the purposes of an ECI, the Court sided
with the applicants: the notion of ‘legal act’ in Article 11(4) TEU, and
Articles 2(1) and 4(2)(b) of the ECI Regulation cannot be interpreted to
include only final EU acts with legally binding effects vis-à-vis third parties.
The Commission’s position is not justified by the letter of the law or by the
overall purpose of these provisions. This was all the more so since the actions
in question, which concerned the conclusion of an international agreement, fit
squarely into the definition of a ‘Decision’ in accordance with Article 288(4)
TFEU, as clarified in Case 114/12 Commission v Council.
Besides, a broad interpretation of ‘legal act’ is mandated by the democratic
principle on which the EU is founded (Article 2 TEU) (paras 35-37).

In
addition, the Court rejected the Commission’s argument that the Initiative
could not have been registered because the suggested actions did not aim to the
implementation of the Treaties and thus were destructive to the law-making
process. According to the Court, there is nothing in Article 11(4) TEU or
Article 2(1) ECI Regulation indicating that citizens cannot act through an ECI
in order to prevent the adoption of a legal act. Furthermore, the conclusion of
TTIP and CETA would have modified the EU legal order. As such, by advocating to
stop the two agreements, the ‘Stop TTIP’ organisers were actually acting for
the implementation of the current Treaties (para 41). In any case, Initiatives
that propose the non-signature and non-conclusion of an international agreement
produce legal effects since they may prohibit the modification of EU law
intended by the said agreement (para 43).

Lastly,
even though the Court did not explicitly address the applicants’ second claim on
the unequal treatment of their Initiative in comparison with the Swissout
Initiative, it did address the paradoxical situation that resulted from the
treatment of the two Initiatives. This paradox resulted from the fact that,
according to the Commission’s interpretation, an ECI could propose the
termination of an existing international agreement but not the termination of
the negotiations towards such agreement. The Court took a citizen-friendly
approach in saying that citizens should not be obliged to wait until an
agreement is concluded before they can contest the conclusion of the agreement
through an ECI (para 44). In this sense, the Court has put proposals asking for
the termination of negotiations on a par with those asking for the opening of
negotiations, and has interpreted the scope of the ECI as being capable of
encompassing both type of proposals.

Commentary

I
had commented on an earlier publication that the ‘Stop TTIP’ case was a good
opportunity for the CJEU to step in and point out the correct interpretation of
Article 4(2)(b) of the ECI Regulation regarding proposals concerning the
conclusion of international agreements. It would seem that the General Court
has seized that opportunity. The judgment widens the scope of the ECI by
completely overruling the Commission’s interpretation of legal admissibility in
the particular context. In this sense, the judgment is a positive and
constructive development not only for the ECI organisers, who had been waiting for
it for almost three years, but also for those interested in starting an ECI
campaign on a topic related to an international agreement, as well as for ECI
stakeholders who have been calling for a more flexible legal admissibility
test.

What
makes the case especially interesting is the extensive reliance of the Court on
the nature of the ECI as a democratic participation mechanism that intends to
foster democratic dialogue and give citizens the opportunity to address the
Commission in order to request action. For instance, the Court implicitly
rejected the Commission’s first argument that a potential breach of Article
11(4) TEU was irrelevant and that the only relevant legal text should be the
ECI Regulation which is based on Article 24 TFEU and stipulates the details of
the legal admissibility test. Both the Court’s interpretation of ‘legal acts’
for the purposes of registering an ECI (paras 35-36) and that of ‘implementing
the Treaties’ (para 41) relies on a joint reading of Article 11(4) TEU and the
relevant provisions of the ECI Regulation. The Court even considered the ECI in
light of the fundamental principle of democracy as included in the Preamble of
the Treaty and the EU Charter of Fundamental Rights in order to broaden the
scope of the right to bring an ECI beyond the Commission’s delineation (para
37).

In
addition, the Court has held a more restrictive view than the Commission on
what is an ‘unacceptable interference with the adoption of a legal act’ when it
comes to an ECI. According to the Court, the very notion of citizens’
participation in the democratic life of the EU - of which the ECI is part -
includes the possibility to ask for the modification, as well as the partial or
total repeal of legal acts. A true form of citizens’ participation in the
democratic life of the EU should give the opportunity to citizens to obstruct,
or interfere with, the adoption of a legal act. Since it is entirely up to the
Commission to decide the follow-up of a successfully submitted ECI after the
public hearing of that ECI (Article 10 ECI Regulation), it could not be said
that the registration of ‘Stop TTIP’ would have been an unacceptable
interference with the legislative process or that it would have breached the
principle of institutional balance (paras 45-46). It would seem, therefore,
that the Court has taken into consideration the overall discretion of the
Commission at the end of the ECI process when interpreting the legal
admissibility test, which takes place at the beginning.

Given
that this is only the second time that the General Court annuls a Commission’s
decision to reject a proposed ECI, the answer to the question ‘what happens now?’
is not entirely clear. After the Minority
SafePack case, the Commission registered the part of the ECI that it
considered admissible. As a response to the judgment, the Commission also
issued a Decision elaborating on its reasons for
only registering part of the ECI. The situation this time around is more complicated.
As mentioned above, the ‘Stop TTIP’ organisers went ahead with collecting
signatures despite the refusal of their ECI. Impressively, within one year
(October 2014 – October 2015) the campaign collected around 3.3 million signatures, more than any of the formally
registered ECIs. Subsequently, the organisers stated in their website: ‘we demand that the European
Commission treat us like a regular ECI which means we expect an official
response from the European Commission and a public hearing in the European
Parliament.’ The Commission is now faced with interesting dilemmas: Will it
register the ECI or pursue the case further by appealing before the European
Court of Justice? If it does register the ECI, will it accept the collected
signatures or will it oblige the organisers to start over? In its plans to propose revisions
to the ECI in the near future, will the Commission try to overturn the new judgment
– or accept and fully incorporate it?

The
factor of time also makes the upcoming Commission’s response to this case
particularly noteworthy. Between 2014 and 2017 we have seen major developments
with regard to TTIP and CETA, including 15 negotiating rounds on TTIP up to October 2016 and a
proposal in July 2016 by the Commission
to the Council for the signature and conclusion of CETA. More recently, the European Parliament voted in favour of CETA after
Wallonia nearly blocked the agreement. All of these developments are in fact
the exact opposite of what the ‘Stop TTIP’ organisers were requesting in their
proposal, which indicates the importance of momentum to an ECI’s overall
success.

On
a final note, I wonder what the implications of the General Court’s judgment
are with regard to future ECIs relating to Brexit. It would seem that the
judgment has opened the door to ECI proposals objecting to a possible future
agreement on the UK-EU relationship, assuming that such an agreement will be eventually
negotiated on the basis of Article 207 and 218 TFEU. Of course we have a long
way to go before this issue even becomes relevant – if it ever becomes relevant
at all. However, such a scenario would certainly open a new dimension to
citizens’ participation and voice in the Brexit process. Meanwhile, let’s see
how the Commission will respond to Stop
TTIP and how the organisers will continue their campaign.

Photo
credit: Stop TTIP

Barnard
& Peers: chapter 24

[1] The judgment is not available in
English yet. This commentary is based on my own translation from the Greek
version and any translation errors are mine.

Wednesday, 10 May 2017

What immigration rights do non-EU
citizens have under EU law? There are three main areas of EU law that address
this issue: EU immigration and asylum law; EU treaties with non-EU countries;
and EU free movement law. The latter area of law is focussed on EU citizens’ right
to move between Member States, and so only covers non-EU citizens if they are
family members of EU citizens who have moved to another Member State. Those
rules also apply by analogy where an EU citizen with a non-EU family member has
moved to another Member State, then moved back to that citizen’s home Member
State. (These are known as Surinder Singh
cases: see this discussion
of the ECJ’s most recent ruling on such cases, from 2014).

But what if an EU citizen has a
non-EU family member, but has never moved to another Member State? Such cases
fall outside the scope of EU free movement law. They will therefore in principle
fall solely within the scope of national law, unless either EU immigration and
asylum law or EU treaties with non-EU countries apply (they usually will not).
But in a limited number of cases, there is a fourth category of EU law
which might apply to them: EU citizenship law.

This principle was first set out
in the 2011 judgment in Ruiz
Zambrano, which concerned Belgian children living in Belgium with two
non-EU parents. The ECJ ruled that expelling the non-EU parents would in effect
would result in the departure of the children from the EU, thereby risking the ‘genuine
enjoyment of the substance’ of those children’s EU citizenship rights.

Subsequent ECJ case law
(discussed here)
made clear that this principle is apparently restricted to the non-EU parents
of EU citizen children living in their home State. Cases very similar to Zambrano – two non-EU parents of an EU
child – are rare, because Member States now rarely, if ever, confer nationality
upon children simply because they are born on the territory. However, there are
rather more cases where: a) a home-State EU citizen marries a non-EU citizen, b)
their child gets home-State citizenship because one of her parents is a
home-State citizen; and c) the parents’ relationship ends.

In those cases, Ruiz Zambrano still potentially applies,
as long as the non-EU parent is the ‘primary carer’ for the home-State EU
citizen child. In that case, removing this parent to a non-EU country would in
effect force the EU citizen child to leave the EU as well. But when exactly does the ‘primary carer’ test
apply? The ECJ clarified this issue in today’s important judgment in Chavez-Vilchez
and others.

Judgment

Chavez-Vilchez and others concerned a number of non-EU parents of
Dutch children in the Netherlands, who sought to argue that they were primary
carers of those children, and so entitled to residence in accordance with the Ruiz Zambrano judgment. The Dutch government
argued that they could not automatically be considered primary carers if it was
possible for the other parent, ie the Dutch citizen, to take care of the children:

…the mere fact
that a third-country national parent undertakes the day-to–day care of the
child and is the person on whom that child is in fact dependent, legally,
financially or emotionally, even in part, does not permit the automatic
conclusion that a child who is a Union citizen would be compelled to leave the
territory of the European Union if a right of residence were refused to that
third-country national. The presence, in the territory of the Member State of
which that child is a national or in the territory of the Union, as a whole, of
the other parent, who is himself a Union citizen and is capable of caring for
the child, is, according to the Netherlands Government, a significant factor in
that assessment (para 66)

While the Court of Justice agreed
that the non-EU parents could not automatically be considered as primary carers
where the home state EU citizen child was dependent upon them, the Court’s
approach was more open. It began by restating prior case law: the key issue was
‘who has custody of the child and whether that child is legally, financially or
emotionally dependent on the third-country national parent’ (para 68). It then
reiterated, following Zambrano, that
dependency was particularly significant (para 69). Then it added new detail on
how to assess dependency:

…it is
important to determine, in each case at issue in the main proceedings, which
parent is the primary carer of the child and whether there is in fact a relationship
of dependency between the child and the third-country national parent. As part
of that assessment, the competent authorities must take account of the right to
respect for family life, as stated in Article 7 of the Charter of
Fundamental Rights of the European Union, that article requiring to be read in
conjunction with the obligation to take into consideration the best interests
of the child, recognised in Article 24(2) of that charter (para 70).

For the
purposes of such an assessment, the fact that the other parent, a Union
citizen, is actually able and willing to assume sole responsibility for the
primary day-to-day care of the child is a relevant
factor, but it is not in itself a sufficient ground for a conclusion
that there is not, between the third-country national parent and the child,
such a relationship of dependency that the child would be compelled to leave
the territory of the European Union if a right of residence were refused to
that third-country national. In reaching such a conclusion, account
must be taken, in the best interests of the child concerned, of all the
specific circumstances, including the age of the child, the child’s physical
and emotional development, the extent of his emotional ties both to the Union
citizen parent and to the third-country national parent, and the risks which
separation from the latter might entail for that child’s equilibrium.
(para 71; emphases added)

The Court went on to answer
questions from the national court about the burden of proof in Zambrano cases, which were connected
with the substantive test to be applied. The Dutch government had argued:

…the burden of
proof of the existence of a right of residence under Article 20 TFEU lies
on the applicants in the main proceedings. It is for them to demonstrate that,
because of objective impediments that prevent the Union citizen parent from
actually caring for the child, the child is dependent on the third-country
national parent to such an extent that the consequence of refusing to grant
that third-country national a right of residence would be that the child would
be obliged, in practice, to leave the territory of the European Union (para 74).

Although the ECJ
accepted that the burden of proof lay upon the non-EU parent (para 75), it also
ruled that national authorities ‘must ensure that the application of national
legislation on the burden of proof’ in such cases ‘does not undermine the
effectiveness’ of EU citizenship rights (para 76). This meant that the
authorities had to make ‘the necessary inquiries’ to find out where the EU
citizen parent lived, ‘whether that parent is, or is not, actually able and
willing to assume sole responsibility for the primary day-to-day care of the
child’ and whether the EU citizen child was dependent upon the non-EU parent
(para 77).

In effect, the Court ruled that while
the non-EU citizen must make a prima
facie case, national authorities share some of the burden to investigate
some aspects of the case. Again, the substantive test applicable is less
stringent than urged by the Dutch government.

Comments

Today’s judgment clarified a
number of issues relating to Zambrano
cases, following on from last year’s judgments in CS and Rendón Marín
(discussed here)
which clarified when non-EU Zambrano parents
could be expelled for public policy reasons. While the 2016 judgments referred
to the child’s best interests, age, situation and dependency (referring to case
law of the European Court of Human Rights), today’s judgment also refers to ‘physical
and emotional development’, ‘emotional ties’ to both parents, and the effect of
separation on the child. All of these are factors relating to the child, not to
the non-EU parent; but all of them nevertheless concern the child’s links with
that parent.

The Dutch government’s desired
focus on the capability of the EU citizen parent takes a back seat to the child’s
best interests, as further elaborated by the Court. This will protect more
non-EU parents, but in a differential way. Oddly, the Court’s case law does not
take express account of situations of joint custody, or the more general argument
that the child’s best interest will usually be to maintain strong relationships
with both parents (assuming they are
not negligent or abusive).

Could it also be argued that the requirement
of always seeking to identify a ‘primary carer’ is problematic from the point
of view of gender equality? Due to the
division of labour relating to child care in practice, the Court’s rulings would
classify more non-EU mothers than non-EU fathers as ‘Zambrano carers’; but the expulsion of those fathers will only
increase the childcare demands on the EU citizen mother who remains, as well as
disrupt the child’s right to maintain a relationship with his father. Of
course, the presence of the parent who looks after a child day-to-day is
essential; but children love the parent who kicks the ball as well as the
parent who cooks the meal.

The procedural aspects of the
Court’s judgment are interesting, but raise further questions: is there a right
to appeal, to a decision within a reasonable time, to a lawyer, to legal aid?
In last year’s judgments, the Court of Justice referred to concepts from EU free
movement law and its relevant case law when discussing the substantive test for
expelling Zambrano carers; but it
made no such cross-references today. The long-term immigration status of the
parent is also an open question, although Zambrano
noted that there should be access to employment to make the residence rights of
the parent effective.

Finally, a Brexit point: the draft
EU position for negotiating acquired rights does not appear to cover Zambrano
carers. From a technical point of view, this is logical because the case law
concerns (from the UK’s perspective) non-EU parents of UK citizens who have not
moved within the EU. So no free movement rights have been acquired; we are rather
talking of EU citizenship rights
which will necessarily be lost when the UK ceases to be a Member State, since
citizenship of the EU is defined as deriving from the nationality of a Member
State. But from a human point of view, any deterioration in legal status could damage
or even shatter the family lives of the children concerned. Zambrano carers should therefore be
protected ideally in the Brexit talks, or failing that by the UK unilaterally.

In particular, the second-phase
CEAS measures contain detailed rules on detaining asylum-seekers in two
cases: a) general rules in the Reception
Conditions Directive, which were the subject of a first ECJ ruling in 2016
(discussed here)
and a recent opinion
of an Advocate-General; and b) more specific rules in the Dublin III
Regulation, applying to asylum-seekers whose application is considered to be
the responsibility of another Member State under those rules. Recently, the ECJ
ruled for the first time on the interpretation of the latter provisions, in its
judgment in the Al Chodor case.

As we will see, the Court took a
strong view of the need for the rule of law to apply in detention cases.
Moreover, its ruling is potentially relevant not just to Dublin cases, but also
detention of asylum-seekers and irregular migrants in other contexts too.

The rules on detaining
asylum-seekers in the context of the Dublin process are set out in Article 28 of the Dublin III Regulation. First of
all, Article 28(1) states that asylum seekers can’t be detained purely because
they are subject to the Dublin process. Then Article 28(2) sets out the sole
ground for detention: when there is a ‘significant risk of absconding’. If that
is the case ‘Member States may detain the person concerned in order to secure
transfer procedures in accordance with’ the Dublin rules, ‘on the basis of an individual
assessment and only in so far as detention is proportional and other less
coercive alternative measures cannot be applied effectively’.

Next, Article 28(3) sets out
detailed rules on time limits for ‘Dublin detention’; these are the subject of
the pending Khir Amayry case. Finally, Article
28(4) states that the general rules on guarantees relating to procedural rights
and detention conditions set out in the Reception Conditions Directive apply to
asylum-seekers detained under the Dublin rules.

Al Chodor concerned the interpretation of the grounds for detention
under Article 28(2): what is a ‘serious risk of absconding’? The Dublin III Regulation offers some limited
clarity, defining ‘risk of absconding’ as ‘the existence of reasons in an
individual case, which are based on objective criteria defined by law, to
believe that an applicant or a third country national or a stateless person who
is subject to a transfer procedure may abscond.’ (Article 2(n) of the
Regulation).

Facts

The case relates to an Iraqi man
and his two minor children who were travelling from Hungary in the Czech
Republic, without any documentation to establish their identity, with the aim
of joining family members in Germany. After stopping the Al Chodors, the Czech
Foreigners Police Section (FPS) consulted the Eurodac database and found that
they had made an asylum application in Hungary. As a consequence, the Al Chodors
were subjected to the transfer procedure according to Article 18(1)(b) of the
Dublin III Regulation. In addition, the FPS took the view that there was a ‘serious
risk of absconding’, given that the Al Chodors had neither a residence permit
nor accommodation in the Czech Republic, while they were waiting for their
transfer to Hungary.

So, they placed the Al Chodors in
detention for 30 days pending their transfer pursuant to Paragraph 129(1) of
the national law on the residence of foreign nationals, read in conjunction
with Article 28(2) of the Dublin III Regulation. The Al Chodors brought an
action against the decision ordering their detention to the regional Court,
which annulled that decision, finding that Czech legislation does not lay down
objective criteria for the assessment of the risk of absconding within the
meaning of Article 2(n) of the Dublin III Regulation. That Court accordingly
ruled that the decision was unlawful. Following the annulment of the decision
of the FPS, the Al Chodors were released from custody.

The FPS brought an appeal on a
point of law before the Supreme Administrative Court against the decision of
the Regional Court. According to the FPS, the inapplicability of Article 28(2)
of the Dublin III Regulation cannot be justified by the mere absence in Czech
legislation of objective criteria defining the risk of absconding. That
provision subjects the assessment of the risk of absconding to three
conditions, namely an individual assessment taking account of the circumstances
of the case, the proportionality of the detention, and the impossibility of
employing a less coercive measure. The FPS has submitted that it satisfied
those conditions.

The Supreme Administrative Court
was uncertain whether the recognition by its settled case-law of objective
criteria on the basis of which the detention of persons pursuant to Paragraph
129 of the Law on the residence of foreign nationals may be carried out can
meet the requirement of a definition 'by law' within the meaning of Article
2(n) of the Dublin III Regulation, in so far as that case-law confirms a
consistent administrative practice of the FPS which is characterised by the
absence of arbitrary elements, and by predictability and an individual
assessment in each case. So the Court decided to refer to the European Court of
Justice for a preliminary ruling asking whether Article 2(n) and Article 28(2)
of the Dublin III Regulation, read in conjunction, must be interpreted as
requiring Member States to establish, in a national law, objective criteria
underlying the reasons for believing that an applicant for international
protection who is subject to a transfer procedure may abscond, and whether the
absence of those criteria in a national law leads to the inapplicability of
Article 28(2) of that regulation.

Judgment

The Court of Justice first of all
ruled that Article 2(n) of the Dublin III Regulation explicitly requires that
objective criteria defining the existence of a risk of absconding be defined by
the national law of each Member State (paragraph 27-28). Then, determining
whether the word ‘law’ must be understood as including settled case-law, the
Court reaffirmed that in interpreting a provision of EU law, it is necessary to
consider not only its wording but also the context in which it occurs and the
objectives pursued by the rules of which it forms part (judgment
of 26 May 2016, Envirotec Denmark, paragraph
27).

So with regard to the general
scheme of the rules of which Article 2(n) of Dublin III Regulation forms part,
the Court, referring to recital 9 of that regulation, states that the regulation
is intended to make necessary improvements, in the light of experience, not
only to the effectiveness of the Dublin system but also to the protection of
fundamental rights afforded to applicants under that system. This high level of
protection is also clear from Articles 28 and 2(n) of that regulation, read in
conjunction. As regards the objective pursued by Article 2(n) of the Dublin III
Regulation, read in conjunction with Article 28(2) thereof, the Court recalls
that, by authorizing the detention of an applicant in order to secure transfer
procedures pursuant to that regulation where there is a significant risk of
absconding, those provisions provide for a limitation on the exercise of the
fundamental right to liberty enshrined in Article 6 of the Charter.

In that regard, it is clear from
Article 52(1) of the Charter that any limitation on the exercise of that right
must be provided for by law and must respect the essence of that right and be
subject to the principle of proportionality. Furthermore, it is worth noting
that in this ruling the European Court of Justice explicitly aligns its
interpretation to the European Court of Human Rights (ECtHR), reaffirming that
any deprivation of liberty must be lawful not only in the sense that it must
have a legal basis in national law, but also that lawfulness concerns the
quality of the law and implies that a national law authorizing the deprivation
of liberty must be sufficiently accessible, precise and foreseeable in its
application in order to avoid risk of arbitrariness (judgment
of the European Court of Human Rights of 21 October 2013, Del Río Prada v Spain, paragraph 125).

The Court then concluded by
stating that taking account of the purpose of the provisions concerned, and in
the light of the high level of protection which follows from their context,
only a provision of general application could meet the requirement of clarity,
predictability, accessibility and, in particular, protection against
arbitrariness. It follows that Article 2(n) and Article 28(2) of the Dublin III
Regulation, read in conjunction, must be interpreted as requiring that the
objective criteria underlying the reasons for believing that an applicant may
abscond must be established in a binding provision of general application. In
the absence of such criteria, the detention was unlawful.

Comments

First of all, the Court’s ruling is
likely relevant to the interpretation of other EU measures concerning
immigration detention. In the Returns
Directive, which inter alia concerns
the detention of irregular migrants (as distinct from asylum seekers), the ‘risk
of absconding’ forms part of the ground for detention (as well as one of the grounds for refusing to allow the irregular migrant a period for voluntary departure); and it is defined
exactly the same way as in the Dublin III Regulation. As for asylum seekers who
are detained on grounds other than the Dublin process, a ‘risk of absconding’ is
an element of one of the grounds for detention under the Reception Conditions
Directive, but is not further defined. But a recent Advocate-General’s opinion
notes (at para 73) that this clause aims to prevent ‘arbitrary’ detention,
which was a key feature of the reasoning in the Al Chodor judgment. This surely points to a consistent interpretation
of the two asylum laws. It follows that arguably the Court’s judgment should be
relevant not just to Dublin cases but to any
immigration detention of non-EU citizens in any Member State bound by the
relevant EU legislation.

Most significantly, the Court has
reaffirmed the primacy of Human Rights law in EU asylum law implementation,
highlighting that the development of the EU asylum law itself depends on its
compliance with Human Rights law. In particular, the ECJ’s ruling in this case
first of all reflects the ECtHR’s interpretation of the ‘arbitrariness’ of
detention, which extends beyond the lack of conformity with national law.
Notably, it states that a deprivation of liberty that is lawful under domestic
law can still be arbitrary and thus contrary to the general principles, stated
explicitly or implied, in the Convention (judgment
of the European Court of Human Rights of 9 July 2009, Mooren v. Germany, paragraphs 73-77).

The Court’s ruling also reflects
UN human rights norms. The Human Rights Committee’s General
Comment No. 31 related to the nature of the general legal obligation
imposed on State parties to the UN Covenant on Civil and Political Rights,
which all EU Member States are State parties to, which reads that ‘in no case
may the restrictions be applied or invoked in a manner that would impair the
essence of a Covenant right’ (paragraph 4). Furthermore, the Human Rights
Committee’s General
Comment No. 35 points out that “arbitrariness is not to be equated with
‘against the law’, but must be interpreted more broadly to include elements of
inappropriateness, injustice, lack of predictability and due process of law, as
well as elements of reasonableness, necessity and proportionality” (paragraph
12, see also HRC, Van Alphen v.
Netherlands, paragraph 5.8).

Finally, the Court’s ruling has
confirmed the constitutional value of the Charter of Fundamental Rights of the
European Union, which assumes a critical value in this historical period,
since, as with any constitutional instrument, the more society as a whole is
going through difficult times (such as the perceived ‘migration crisis’ in
Europe), the more important it is to reaffirm its principles and values.

Likewise Article 52 of the EU
Charter states that in no case may restrictions be applied or invoked in a
manner that would impair the essence of a Charter right; in the context of
detention, a fortiori it can be also
affirmed that essential elements of guarantee for that right, as the
requirement of lawfulness and non-arbitrariness for the right of liberty,
cannot be disregarded in any circumstance. The Al Chodor ruling puts meat on the bones of that fundamental
principle.